Suburban Denver had the highest increase in prime office (Class-A and above) occupancy costs, which reflect not only rent, but also local taxes and service charges, from Q1 2016 through Q1 2017, according to CBRE Research’s latest annual Global Prime Office Occupancy Costs report.
In addition to topping the list domestically, suburban Denver’s growth rate of 17.2% year-over-year was the fourth-fastest globally, trailing only Durban, South Africa (21.2%), Buenos Aires (20%) and Stockholm (18.8%). At 15.3% growth, suburban Houston was the second-fastest among U.S. markets, ranking No. 6 globally.
“The average occupancy cost for suburban Denver’s highest-quality office properties is rising in large part due to a robust construction pipeline that is predominantly Class-A or above," said Matt Vance, economist and director of research and analysis for CBRE in Colorado. "The delivery of new top-tier suburban office projects is leading to all-time high lease rates across the board.”
While suburban Denver’s year-over-year change was steep, at a rate of $31.40/SF, the market is far from ranking among the most expensive worldwide, Vance said. That would be Hong Kong Central, at about $303/SF.
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